TaxTMI 
TaxTMI 
2026 (3) TMI 477
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....of varying lengths (7 to 12 feet) and diameters (4" to 8"). It appeared to the Revenue that the imported goods i.e. "second-hand goods", are liable for confiscation being mis-declared, imported in violation of Para 2.17 of the Foreign Trade Policy (FTP) and that the appellant was liable to penalty. Additional Commissioner, vide Order-in-Original, dated 16.05.2013, confiscated the 35.00 MT of old and used pipes; gave an option to redeem the goods on payment of a fine of Rs. 1,30,000 and imposed a personal penalty of Rs. 80,000. On an appeal filed by the appellants, Commissioner (Appeals), Chandigarh, vide Impugned Order, dated 15.07.2013, upheld the decision of the adjudicating authority. Hence, this appeal. 2. Shri Saurabh Kapoor, Learned Counsel for the appellants, reiterates the grounds of appeal. He submits that the imported cargo is no drill pipes as alleged; the goods are not suitable for use as drill pipes and are fit for recovery of metal by melting; even though the photographs were shown the adjudicating authority as well as Commissioner (Appeals) accepted the conjectures of the Department; they cannot be classified as drill pipes under 7304.21 as they were not of normal....
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....tified. He relies on the following cases: * Jas International - 2011 (272) ELT 282 (Tri. Del.) * Maersk India Ltd. - 2001 (129) ELT 1105 (Tri. Del.) * Delco Precitone Jewellers Pvt Ltd. - 2000 (124) ELT 1105 (Tri. Del.) 5. Shri Anurag Kumar, Learned Authorised Representative, for the Revenue submits that the appellants mis-declared the goods.; violated the provisions of Para 2.17 of Foreign Trade Policy (Import of Restricted Goods); the appellants did not possess the required authorization or license; the goods are rendered liable to confiscation under Section 111(d); mis-declaration of pipes as scrap was with intent to evade payment of applicable duty of Rs. 1,20,146. Hence, the goods were correctly confiscated and redemption fine and penalty was rightly imposed. He submits that HSN Explanatory Notes to Heading 72.04 clearly exclude from the definition of "waste and scrap" any article that can be re-used for its former purpose or adapted for other uses, either with or without repair; examination and photographs confirm the goods are pipes, albeit used and cut; the fact that they are "gas cut" and have varying dimensions does not automatically render t....
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....he considered opinion that such an examination would have thrown a certain light on the exact nature of the goods. Revenue officers are not experts to decide the same. Revenue did not put forth any documentary evidence which indicates that the cargo was used/second hand goods. It is not clear as to whether the goods could be used for the purposes they were manufactured. The importer did not accept the findings by the department. 9. We find that Revenue attempts to classify the Heavy Melting Scrap imported by the appellants as second hand used pipes for the reason that a portion of the cargo consists of drill pipes of certain lengths. We find that the original authority and the appellate authority have given a go-bye to the relevant section and chapter notes, particularly those defining waste and scrap. We find that Section Note 8 to the Schedule 1 of Customs Tariff Act provides as follows: 8. In this Section, the following expressions have the meanings hereby assigned to them: (a) waste and scrap: metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, we....
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....d, therefore, liable for confiscation. The Revenue also submitted that in the impugned order, the Commissioner (Appeals) held that it is common knowledge that no finished product becomes scrap merely on the ground that it is used. An item needs to be unusable/unserviceable to become scrap. 4. We find that the appellants made import of Heavy Melting Scrap consisting of old and used axles. We have seen the opinion of Chartered Accountant dated 29-10-2005. There is no whisper in the expert opinion that the impugned goods are serviceable. 5. Further, we find that the Hon'ble Supreme Court in the case of Tata Iron & Steel Company Ltd. (supra) held that the old and used rails, billets, plates, axles, channels etc, are to be treated as scrap. The Tribunal in the case of Global Shiptrade (P) Ltd. (supra) held that the old and used rusty pipes in the absence of any evidence are serviceable, are to be treated as melting scrap. In view of the above discussions and in view of the decision of the Hon'ble Supreme Court, we find merit in the contention of the appellants. The impugned order is set aside and the appeal is allowed. 11. We further find that Tribunal in the case o....
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....crap. 4. We find that the appellants made import of Heavy Melting Scrap consisting of old and used axles. We have seen the opinion of Chartered Accountant dated 29-10-2005. There is no whisper in the expert opinion that the impugned goods are serviceable. 5. Further, we find that the Hon'ble Supreme Court in the case of Tata Iron & Steel Company Ltd. (supra) held that the old and used rails, billets, plates, axles, channels etc, are to be treated as scrap. The Tribunal in the case of Global Shiptrade (P) Ltd. (supra) held that the old and used rusty pipes in the absence of any evidence are serviceable, are to be treated as melting scrap. In view of the above discussions and in view of the decision of the Hon'ble Supreme Court, we find merit in the contention of the appellants. The impugned order is set aside and the appeal is allowed. 12. We also find that the appellants relied upon the case of Lucky Steel Industries. We find that coordinate Bench at Ahmedabad held in this case, vide Final Order No. A/10801-10802 /2023 dated 06.04.2023, held that 5.4 The imported goods are correctly classifiable under Heading 7204 of the Customs Tariff Act and are elig....
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....ced that import policy was amended and to permit the Kandla port for import of metallic waste and scrap in un-shredded, compressed and loose from. 5.8 We also find that in the present matter the only reason for increase in value made is mis-declaration in description of goods. No evidence of additional remittance of money is brought out. Also there is an issue that scrap is not a type of goods which can be easily compared. The appellants have also taken objection that the value adopted for assessment has no legal basis. We also find that, there is no admission of Appellant admitting to undervaluation, or any evidence of any extra financial consideration apart from the declared transaction value, paid to the overseas supplier. Further, there is no evidence that the appellant and overseas supplier are related parties or that the invoice value was not the transaction value. The Department has failed to show any contemporaneous evidence of higher price, and thus the transaction value cannot be rejected, as held by the Hon'ble Apex Court in Commissioner Central Excise v. Sanjivani Non- Ferrous Trading Pvt. Ltd. - (2019) 2 SCC 378 = 2019 (365) E.L.T. 3 (S.C.) and Commissioner of....